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Manara takes a $2.5bn stake in Brazilian mining giant

2REKCFR Soroako, Indonesia. 28th July, 2023. A worker seen in action at Nickel mine, operated by PT Vale Indonesia in Sorowako. U.S. Geological Survey Shows that Indonesian nickel reserves ranked first, reaching 21 million tons or equivalent to 22% global reserves. Credit: SOPA Images Limited/Alamy Live News SOPA Images/Alamy Live News via Reuters Connect
A Vale nickel mine in Indonesia; the Manara Minerals partnership comes at a time when VBM is expected to invest in new projects worth up to $30 billion
  • Saudi Arabia’s Manara buys 10% stake in Vale
  • Copper and nickel projects worth $30bn
  • Maaden increases stake in phosphates

Manara Minerals, a joint venture between Saudi Arabian Mining Co (Maaden) and the sovereign Public Investment Fund (PIF), has completed a $2.5 billion deal to acquire a stake in a subsidiary of Brazilian giant Vale.

Maaden said in a filing to the Saudi Exchange that it has acquired 10 percent of Vale Base Metals Limited (VBM) following approval from regulatory authorities.

The partnership, first announced in July 2023, comes as VBM is expected to invest in new projects worth up to $30 billion across Brazil, Canada and Indonesia over the next decade, moving towards a significant increase in copper and nickel production.

It aims to increase copper production from about 350 metric tonnes per year to 900 metric tonnes per year and nickel production from 175 metric tonnes to more than 300 metric tonnes per year.

“This strategic investment by Manara reflects the confidence in our unique mineral endowment and in our ability to deliver metals needed for the energy transition,” said Eduardo Bartolomeo, Vale’s CEO.

Bob Wilt, vice chairman of Manara Minerals and CEO of Maaden, said: “As the inaugural investment made by Manara, our partnership with VBM is a strong statement of the company’s ambition and mandate to globally source minerals that are vital for sustainable and diversified economic growth. 

“We will continue to build mining as the third pillar of the Saudi economy, and we look forward to working with VBM at a time when critical minerals have never been more important.”

VBM is North America’s largest integrated nickel producer and the largest copper business globally. 

The company has secured agreements to supply low-carbon and high purity nickel to major automakers as it focuses on expanding mine life and developing growth projects across the portfolio.

Maaden buys MWSPC stake

Maaden has also bought Mosaic Phosphates’ 25 percent stake in Maaden Wa’ad Al Shamal Phosphate Company (MWSPC) for $1.5 billion, the stock market said on 30 April. Maaden will raise its capital by nearly 3 percent to SAR38 billion ($10.14 billion) through issuing the shares to Mosaic at a cost of SAR5.62 billion ($1.49  billion), a statement said. 

MWSPC is a joint venture between Maaden (owning 60 percent), Mosaic Phosphates (25 percent), and Saudi Basic Industries Corporation (Sabic) (15 percent). Sabic is 70 percent owned by state oil giant Aramco and Maaden is 50 percent government owned. 

“Maaden’s stake in the share capital of MWSPC will increase from 60 to 85 percent, while the percentage of direct and indirect ownership by the Seller in Maaden will be equal to approximately 2.92 percent,” the statement said, adding Sabic would remain a 15 percent shareholder in MWSPC. 

Priority industry

Under Vision 2030, Saudi Arabia has made mining a priority industry for growth with the government estimating the kingdom’s untapped mineral wealth at $2.5 trillion, based on exploration of 30 percent of the country’s mineral region.

Last month, local and international investors were invited to bid for the latest round of mining licences in Saudi Arabia.

The six mining opportunities revealed by the Ministry of Industry and Mineral Resources include gold, copper, zinc, lead and silver ore and cover a total area of more than 940 sq km.

The sites stretch from the Najran region in the south to the south-western region of Aseer, as well as Makkah and the capital Riyadh.

Analysts say Saudi Arabia is still a small player in global metals and mining, where the leading producers across a range of minerals are major economies such as China, the United States, Canada and Russia. 

But Saudi Arabia and Morocco hold the bulk of the world’s high-quality, accessible phosphate reserves. When processed with ammonia, phosphate produces the basic fertilisers for the world’s agricultural sector. 

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